Three New Jersey Men Plead Guilty To Trafficking More Than $13M In Cisco Counterfeits

Three co-conspirators now face jail time for selling counterfeit Cisco products in stores that, if genuine, would be worth more than $13 million, according to the DoJ.

Three New Jersey men have pleaded guilty and now face jail time for peddling counterfeit Cisco products in stores across the retail industry, according to the U.S. Department of Justice.

Musa Karaman pleaded guilty on Thursday before U.S. District Judge Georgette Castner in Trenton federal court to an information charging him with one count of trafficking in counterfeit goods, said a press statement from the U.S. Attorney’s Office, District of New Jersey. Karaman’s sentencing is scheduled for Jan. 4.

Sadri Ozturan and Israfil Demir each pleaded guilty before Judge Castner in August to separate informations charging each with one count of trafficking in counterfeit goods. Sentencing for Ozturan is scheduled for Dec. 13 and sentencing for Demir is scheduled for Dec. 14, according to the U.S. Attorney’s statement.

The guilty pleas are the result of the government’s investigation and a referral from Cisco and Amazon’s Counterfeit Crimes Unit (CCU), Amazon said in a statement.

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The three men ran a wide-ranging operation selling counterfeit Cisco networking devices that they procured through illicit suppliers based in China from 2017 through 2021. Federal agents raided their warehouse in May 2021 in New Jersey and seized more than 7,000 counterfeit devices that, if genuine, would be worth more than $13 million, according to the filings.

Federal law enforcement arrested the first of the co-conspirators and charged him with one count of conspiracy to commit mail and wire fraud in May 2022.

The offenses that the men pleaded guilty to carry a maximum potential penalty of 10 years in prison and a maximum fine of $2 million, according to Amazon.

“These guilty pleas are a testament to what we are able to accomplish when brands, law enforcement, and Amazon work together,” Kebharu Smith, director of Amazon’s CCU said in a statement. “Counterfeiters are beginning to see that if you attempt to defraud brands, Amazon, or our customers, the consequences are severe. We continue to express our gratitude for the collaboration with Cisco and the work of the Department of Justice.”

Cisco, like many other networking gear vendors, is unfortunately no stranger to its IT products being sold on the gray market, or products sold legally outside of the brand’s permission by unauthorized dealers, as well as something more nefarious -- its products being stolen or counterfeited.

Both counterfeit goods and gray market activities impact legitimate business for Cisco channel partners who lose out on deals to other partners who win with counterfeit, or low-quality gray market gear or even customers themselves purchasing outside of the Cisco supply chain. The problem became worse in 2022 when the disruption of global supply chains resulting from the COVID-19 pandemic increased lead times for procuring technology hardware.

Cisco, for its part, works to combat counterfeiting via its Cisco Brand Protection team. The tech giant is also part of the Alliance for Gray Market and Counterfeit Abatement (AGMA), which counts Hewlett Packard Enterprise, Juniper Networks and Microsoft among its members. The Alliance has estimated that the economic loss to channel partners from these activities exceeds $100 billion a year.

“We are committed to protecting our valued customers and legitimate authorized Cisco channel partners and maintaining the integrity and quality of Cisco products and services,“ said Cisco’s head of the Global Brand Protection team Al Palladin in a statement. ”The Cisco Brand Protection team also appreciates the strong collaboration with Amazon’s CCU for jointly making the criminal referral that brought this individual to justice.”

A Florida man last summer was arrested and charged with importing and selling counterfeit Cisco networking equipment that, if authentic, would have been valued at more than $1 billion. Ron Aksoy, also known as Dave Durden, was said to have run at least 19 companies formed in New Jersey and Florida, as well as at least 15 Amazon storefronts and 10 eBay storefronts and multiple other entities over the last 12 years, through which he allegedly imported tens of thousands of counterfeit Cisco networking devices from China and Hong Kong and resold the gear to unwitting U.S. and overseas customers after falsely representing the products as new and genuine with fake Cisco labels, packaging and documentation.